Galaxy To Buy BitGo For $1.2 Billion
Bitcoin-focused asset management firm Galaxy Digital will be acquiring digital asset custody provider BitGo for $1.2 billion — the largest-ever acquisition of a company offering bitcoin services.
“The acquisition will make Galaxy Digital a crypto-focused financial-services firm with more than $40 billion in assets under custody,” The Wall Street Journal reported. “The combined company will offer an array of products and services, including trading, custody and asset management, investment banking, prime lending, tax services and even a mining operation, aimed mainly at institutional investors.”
Galaxy Digital will reportedly pay $265 million in cash and issue 33.8 million new shares, with BitGo shareholders set to own about 10% of the newly-formed company. BitGo founder Mike Belshe will remain with the merged company.
Such a large acquisition will not just make Galaxy Digital a leader in the Bitcoin space, but give it enhanced ability to compete within the legacy financial system.
“In order for crypto to become this revolutionary transformation, you’re going to need bigger companies that are going to knock heads against the bigger businesses,” Galaxy’s founder Mike Novogratz told the Journal.
Though Galaxy and BitGo offer services that cover cryptocurrencies beyond bitcoin, both firms have maintained significant focuses on bitcoin. Earlier this month, Galaxy Digital filed for regulatory approval to offer a bitcoin exchange-traded fund (ETF). And Belshe was first inspired by the technology behind Bitcoin as he developed BitGo’s multisignature wallet technology to secure his own BTC holdings.
Bitcoin has also been leading the way in a larger cryptocurrency bull market, which has doubtlessly fueled this record-breaking acquisition.
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